Foreclosure Options

A foreclosure occurs when a lender repossesses a debtor's home.  In order to foreclose in California, a mortgage lender must comply with State Law and file with the County Recorder a document known as a Notice of Default, or NOD.  This must be served upon the homeowner.  Such notice gives the homeowner ninety days to bring the delinquency current. If the delinquency is not cured or other arrangements are not made, the house will typically either get sold at a subsequent auction or taken back as real estate owned by the lender.

At times, foreclosure can be the best option for some debtors depending upon their unique circumstances.  Careful analysis must take place and timing is extremely important.

Chapter 13 Bankruptcy
One should also carefully consider Chapter 13 Bankruptcy, which allows mortgage arrearage to be repaid over a three to five year period.  In some cases, judgment liens and second and third mortgages which are wholly unsecured can be avoided and classified as unsecured debt.  An experienced attorney will help you decide if Chapter 13 Bankruptcy is right for you.  For more information on Chapter 13 Bankruptcy, click here. 

Loan Modification
Lenders are now more willing than ever to modify your loan to avoid them having to report another foreclosure.  Mortgage lenders have “Loss Mitigation Rules” which allow them to reduce the interest rate, forgive arrearage, reduce the principal, move payments to the back of the loan, etc.  However, trying to speak to someone who has the authority to enter into a loan modification can prove very frustrating for the average homeowner.  Doan Law Firm has partnered with experts in loan modification programs.  If you are interested in our Loan Modification & Foreclosure Workout Program, click here to contact us today.

Short Sale
A “short sale” takes place when a debtor sells his/her property for whatever the market will bear, and a lender agrees to accept less than what is owed them.  The lender is “shorted” out of some money, hence the name.  Several Doan Law Firm attorneys are also real estate brokers who have experience with short sale transactions.  If you are interested in our short sale services, click here for more information.

Deed in Lieu of Foreclosure
Sometimes a lender would rather you deed the property back to them rather than go through the foreclosure process.  This saves them money and allows you to avoid a foreclosure.  However, there may be debt forgiveness and capital gains tax consequences which should first be carefully examined.